Entry of ADB in agreement with water firms to benefit customers

February 02, 2020

HOUSE leaders yesterday said the entry of Asian Development Bank (ADB) in the process of crafting a new concession agreement with water concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc. would ensure a better deal for the advantage and benefit of their combined 16 million customers.

Anakalusugan party-list Rep. Mike Defensor, Albay Rep. Joey Sarte Salceda, House Assistant Majority Leader and Quezon City Rep. Precious Hipolito Castelo, and Manila Rep. Manny Lopez welcomed the statement of Justice Sec. Menardo Guevarra that Finance Sec. Carlos “Sonny” Dominguez informed him about certain consultants from the ADB who would help address President Rodrigo “Rody” Duterte’s concerns on the alleged “onerous and disadvantageous” provisions of the 25-year concession deals signed in 1997.

“I am positive that the amendments or changes that President Duterte wants will be accomplished since even during the committee hearings conducted by the House of Representatives, Maynilad and Manila Water were both amenable to amend the provisions such as doing away with charging consumers with corporate income tax, the non- intervention of government among others. The Executive’s move to have ADB facilitate the changes is brilliant and gives credence to the social, financial and legal considerations given ADBs experience and credibility. No one can claim that they were bullied in accepting the necessary changes,” said Defensor, who chairs the House committee on public accounts, who led a hearing on the water concession agreement late last year with the House committee on good government.

Salceda, who chairs the House committee on ways and means, said the ADB is also a good-faith partner of the government in ensuring that the terms of agreement are equitable and efficient, as it has always been a steady supporter of addressing Metro Manila’s water woes.

“I think we can come up with better arrangements, as this process will also serve as some sort of audit of the current deal. We expect that the involvement of a professional and dependable partner like the ADB would enable both the government and the concessionaires to arrive at
a deal that is both equitable and efficient in delivering intended public welfare outcomes,” said Salceda.

He said the ADB “already supported the [government] with value-adding projects like the Angat Water Supply Optimization Project, the Manila South Water Distribution Project, and the Umiray-Angat Transbasin Project.”

“President Duterte has already provided the much-needed political impetus to get the concessionaires to sit down and renegotiate the deal in favor of the Filipino people. Getting a team of consultants to study improved terms of the deal provides that critically needed second half of the reform process,” said Salceda.

Castelo said “everything is worth a try,” explaining that ADB is “a reputable international bank extending development loans to developing countries so they deserve the benefit of doubt.”

“No harm in exploring anything. We just hope the final recommendation will be reflective on the interest of the people - no pass on taxes and increase of tariff to consumers. Any all recommendations are subject to review,” said Castelo.

Lopez, who chairs the House committee on Metro Manila development, said “the Filipino people can rest assured that our interest will be protected with Justice Guevarra at the helm of the group to revise the concession agreement.”

“Onerous contracts will be prevented and water flow will be provided 24/7 on our taps. He is highly qualified to ensure and protect the needs and rights of every Filipino,” said Lopez.